Economic Decision Rules Research Articles

Honeycomb: a spatio-temporal simulation model to evaluate management strategies and assessment methods

Abstract In recent years, scientists providing advice to fisheries managers have been granted access to an increasing range of spatio-temporal data from fishing vessels, using tools such as vessel monitoring systems and electronic observation platforms. This information should allow for the provision of more germane advice on the activity of vessels, and hence the likely impact of management measures which are becoming increasingly spatial in nature. However, the development of appropriate management simulation and assessment models has lagged behind the availability of these new data. This paper presents an accessible spatio-temporal simulation framework (Honeycomb) which features a weekly time-step, multiple stocks and vessels, and economic decision rules and applies this to a case study of a spatial evaluation of a simple closed-area fishery policy. We conclude that the development and utilization of such spatio-temporal simulation models is a key research task for fisheries in which both spatial fisheries data and spatial fisheries management are becoming paramount.

Perennial pasture persistence: the economic perspective

Persistence of pasture in grazing systems has technical and economic dimensions. Profit from investment in pasture is maximised when the profit from the pasture is maximised over cycles of investments in pasture over the life of the farm business. The economic decision-rule is that an existing pasture should be replaced when the expected extra average addition to farm profit per year over the whole of the expected life of the next cycle of pasture investment exceeds the expected addition to farm profit from one more year of the existing pasture. This profit-maximising decision-rule means that the persistence of pasture is an economic phenomenon to be accounted for over several cycles of investment—a different concept to technical views that focus on the number of years of existence (i.e. persistence) of a pasture in one investment cycle. The number of years in which a pasture performs near peak potential annual dry matter (DM) production is a useful perspective on pasture persistence. The longer a pasture persists at peak level the more profitable. An empirical example was analysed of a pasture that had declined to carrying annually 6 dry sheep equivalents/ha (DSE/ha) and reinvestment occurred. The new pasture attained a peak of 11 000 kg/dry matter/ha in years 4–7, carrying an extra 15 DSE/ha.year, and declined to 50% of peak DM production by year 11, which was maintained until year 20. The modified internal rate of return for the base model of investing in pasture improvement was 12% real. The profit-maximising life of the pasture analysed was 8 years in repeated cycles over the life of the farm business. If this pasture produced at 65% of peak kg DM/ha for years 11–20, then the pasture was equally profitable whether the life of the pasture was any length from 8 to 20 years. If the pasture maintained production >65% of peak annual kg DM/ha, then longer pasture lives were more profitable than shorter lives.

The Value of Groundwater Modeling to Support a Pump and Treat Design

AbstractA wide range of rules, algorithms, and models are available to design an effective pump and treat remediation system. Often, one refers to the effectiveness of the developed pump and treat system to demonstrate how valuable the use of a groundwater model can be. An economic valuation of the groundwater model is usually missing. This study provides a framework that puts the discussion concerning the use of groundwater models in an economic perspective. It is not only demonstrated that a more effective pump and treat system can be designed using a groundwater model, but also the economic implications of using a groundwater model are calculated. A set of economic decision rules is applied to determine the economic value of a groundwater model. It is shown that investing in a groundwater model can be economically worthwhile. The remediation time is reduced, remediation costs are saved and the property can be sold more early. These benefits outweigh the costs of developing a groundwater model, and hence a positive net benefit (NB) is determined.

TIPP and Lichtenstein modalities for inguinal hernia repair: a cost minimisation analysis alongside a randomised trial

The transinguinal preperitoneal (TIPP) technique using a soft mesh with a memory ring was developed recently for inguinal hernia repair. To compare TIPP with the Lichtenstein method, a randomised trial was conducted (ISRCTN93798494). The aim of this study was to perform an economic evaluation of the TIPP modality compared to the Lichtenstein modality from both a hospital and societal perspective alongside the clinical trial. The TULIP study was a double-blind randomised clinical trial comparing two techniques for inguinal hernia repair (TIPP and Lichtenstein). Correct generation of the allocation sequence, allocation concealment, blinding, and follow-up were used/applied according to the recommendations of the Cochrane Handbook. Next to the cost drivers, the short-form-36 health survey (SF-36) data from the TULIP trial was used to determine utility. The SF-36 data from the TULIP trial were revised using the SF-6D algorithm according to Brazier. Two scenarios-a hospital and a societal perspective-were presented. If the analyses showed no difference in effects (on the SF-6D) the cost effectiveness decision rule to cost minimisation was altered. No significant difference in SF-6D utility between both modalities was found (mean difference: 0.888, 95% CI -1.02 to 1.23); consequently, the economic decision rule became cost minimisation. For the hospital perspective no significant differences in costs were found (mean difference: euro -13, 95% CI euro -130 to euro 104). However, when including productivity gains in the analysis, significant differences (P = 0.037) in costs favouring the TIPP modality (mean saving: euro 1,472, 95% CI euro 463- euro 2,714) were found. The results show that TIPP is a cost-saving inguinal hernia repair technique compared to the Lichtenstein modality against equal effectiveness expressed as quality adjusted life week at 1 year given a societal perspective. In the trial, TIPP patients showed on average a quicker recovery of 6.5 days compared to Lichtenstein patients.

Editorial - Decision rules, government rules, and the costs of vegetation protection in New South Wales

Editorial - Decision rules, government rules, and the costs of vegetation protection in New South Wales

Economics of Variable Rate Lime in Indiana

In Indiana, variable rate application (VRA) of lime is often considered a good place to start site-specific management (SSM). This is because soil pH is one of the most variable of manageable soil characteristics in the state, the availability of essential nutrients is closely related to soil pH, and because spreaders can be retrofitted relatively inexpensively to do VRA. The objective of this study is to evaluate the profitability of VRA for lime as a stand-alone activity. The methodology involves a spreadsheet model using corn and soybean pH response functions estimated with small plot data. The overall results indicate increased annual returns to corn and soybean production with site-specific pH management strategies. On average, SSM with agronomic recommendations provides an increased annual return of $7.24 per hectare (ha) (+1.78%). SSM with the economic decision rule provides an average increase in annual return of $19.55 ha−1 (+4.82%). Information strategy, which uses site-specific information to determine the economically optimal uniform rate of lime, provides an average increase in annual return of $14.38 ha−1 (+3.54%).

Notes: Optimal Economic Selection of Road Design Standards for Timber Harvesting Operations―A Corrected Analytical Model

Abstract A theoretical development is given that corrects a long-accepted analytical model used in road system design. The model assumes that a forested area with uniform conditions of road construction is to be accessed by truck road for timber harvest. A discrete number of specified road design standards are available. Each design standard has known costs per unit length associated with road construction and use. The resulting total cost for any segment of the road when constructed to a given standard and used for timber haul depends fundamentally on the volume of timber transported over that segment. Transported volumes may vary along the length of the road, however, thus changing the associated costs. The emended economic decision rules for specifying road standards along the entire length of the road even as haul volumes change are developed. Examples are given. For. Sci. 43(4):589-594.

Economic decision rules for postemergence herbicide control of barnyardgrass (Echinochloa crus-galli) in corn (Zea mays)

Economic decision rules for postemergence herbicide control of barnyardgrass in corn were developed. Damage and control functions that formed the basis of an economic model were estimated. Barnyardgrass density and time of emergence relative to the crop were fundamental to calculate the damage function. The control function described barnyardgrass dry weight response to variable doses of two herbicides. Both the biologist's and economist's weed control decision rules, derived from the economic model, were influenced by time of weed emergence relative to the crop, corn yield, and price. Inclusion of time of weed emergence relative to the crop improved our interpretative ability of derived decision rules. The biologist's threshold weed density was more sensitive to changes in parameter values than the economist's optimal herbicide dose strategy. Herbicide use with recommended label dose was greater than either the economically optimal or the biologically effective doses. Use of the biologically effective dose for postemergence weed control decisions was cost efficient and could be of practical significance to corn growers.

The Role of Economics in Energy and Environmental Decision Making: An STS Perspective

Contemporary energy and environmental problems continue to pose fundamental challenges to Western models of a successful pattern of life. From the perspective of an integrated study of science, technology, and society, energy and environmental problems can be seen more specifically to raise significant questions about economic decision rules as expressions of those models –i.e.,. as mechanisms for rationalizing traditional energy and environmental patterns of behavior.

Estimating Economic Thresholds for Bollworm, Heliothis zea Boddie, 1 and Boll Weevil, Anthonomus grandis Boh., 2 Damage in Nicaraguan Cotton, Gossypium hirsutum L. 3

The interaction between bollworm and boll weevil and cotton development has been assessed under the climatic conditions of Nicaragua. The ratio of the rate of fruit point production to the rate of cumulative fruit damage (βT/β2) has been used to assess final yields in treated and untreated fields. An economic decision rule for pesticide applications was developed from these data.

Funding for Agricultural Economics: Needs and Strategies for the 1980s

American Journal of Agricultural EconomicsVolume 63, Issue 5 p. 796-805 General Session Funding for Agricultural Economics: Needs and Strategies for the 1980s Bernard F. Stanton, Bernard F. Stanton professor of agricultural economics Cornell UniversitySearch for more papers by this authorKenneth R. Farrell, Kenneth R. Farrell Administrator Economic Research Service, U.S. Department of AgricultureSearch for more papers by this author Bernard F. Stanton, Bernard F. Stanton professor of agricultural economics Cornell UniversitySearch for more papers by this authorKenneth R. Farrell, Kenneth R. Farrell Administrator Economic Research Service, U.S. Department of AgricultureSearch for more papers by this author First published: 01 December 1981 https://doi.org/10.2307/1241246Citations: 1AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Citing Literature Volume63, Issue5December 1981Pages 796-805 RelatedInformation

The complexity of economic decision rules

The postulate of economic rationality (or ‘maximizing’ behavior) is the cornerstone of present-day microeconomic theory. Few economists would dispute the value of the insights this hypothesis has generated. The success of this perspective on economic behavior has inevitably led to the formulation and study of increasingly complex problems of economic choice. Nowadays it is popular to model consumers or business firms as farsighted maximizers of lifetime utility or profits. As Clark (1918) might have remarked, the decisionmakers who populate the latest journal articles seem to display an irrational passion for dispassionate rationality. Why might such a passionate pursuit of rationality be itself irrational? One need not travel very far to discover reasons [Radner (1974)]. After all, decisionmaking can often be quite a costly activity. Even if one ignores the information costs involved in generating the parameters of a sophisticated maximization problem, other resource costs loom large. For example, the computation costs incurred when obtaining an explicit solution to an even moderately complex optimization problem may be prohibitive. Such costs multiply when one stops to consider that the optimization problems studied by economists represent only single facets of the multi-faceted economic environment confronted by most economic agents. Even worse, the assumption that the future holds no genuine surprises for the decision maker is clearly at odds with everyday experience. Imagination is a scarce resource. (What is its shadow price?) These latter considerations call into question the very meaning of the term ‘optimal’ when applied to the solutions of commonly studied maximization problems. Last (but certainly not least) of all, the decision-making processes of real decision-makers are